Legacy Oil + Gas announces year-end results and files annual information form

/NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES. ANY FAILURE TO COMPLY WITH THIS RESTRICTION MAY CONSTITUTE A VIOLATION OF U.S. SECURITIES LAW./

CALGARY, March 22 /CNW/ - Legacy Oil + Gas Inc. ("Legacy" or the "Company") (TSX:LEG) is pleased to announce it has filed on SEDAR its audited financial statements and related Management's Discussion and Analysis ("MD&A") for the year ended December 31, 2009 as well as its annual information form ("AIF") for the year ended December 31, 2009. Selected financial and operational information is outlined below and should be read in conjunction with Legacy's audited financial statements, the related MD&A and the AIF which are available for review at www.legacyoilandgas.com or www.sedar.com.

    
    FINANCIAL + OPERATIONAL HIGHLIGHTS
    ----------------------------------
    

The three month results below reflect approximately two months production from Legacy's two most recent corporate and asset acquisitions:

    
    -------------------------------------------------------------------------
                          Three Months Ended               Year Ended
                              December 31                  December 31
    -------------------------------------------------------------------------
                         2009     2008  % change      2009     2008  % change
    -------------------------------------------------------------------------
    Financial ($000's,
     except per share
     amounts)
    -------------------------------------------------------------------------
    Petroleum and
     natural
     gas sales         31,498    2,413    1,205     47,457   11,284      321
    Funds generated
     by operations(1)  17,368    1,087    1,498     23,013    5,860      293
      Per share basic    0.29     0.22       32       0.94     1.23      (24)
      Per share
       diluted           0.27     0.22       23       0.91     1.21      (25)
    Net income (loss)  (5,381)    (449)  (1,098)   (10,053)     898   (1,219)
      Per share basic   (0.09)   (0.09)       -      (0.41)    0.19     (316)
      Per share
       diluted          (0.09)   (0.09)       -      (0.41)    0.18     (328)
    Capital
     expenditures      30,613    9,126      235     37,218   20,414       82
    Corporate and
     asset
     acquisitions
     (cash
     consideration)   109,279        -      n/a    211,831        -      n/a
    Net debt and
     working capital
     surplus
     (deficit)        (54,045)  (7,182)     653    (54,045)  (7,182)     653
    -------------------------------------------------------------------------
    Operating
    -------------------------------------------------------------------------
    Production
      Crude oil
       (Bbls per
       day)             4,583      520      781      1,833      364      404
      Natural gas
       (Mcf per
       day)               855        5      n/a        286       14    1,943
      Natural gas
       liquids
       (Bbls per
       day)                 3        -      n/a          1        -      n/a
      Barrels of oil
       equivalent
       (Boe per
       day)(2)          4,728      521      807      1,881      366      414
    Average
     realized price
      Crude oil
       ($ per Bbl)      74.13    49.86       49      70.50    84.24      (16)
      Natural gas
       ($ per Mcf)       2.84     7.57      (62)      2.61     8.32      (69)
      Natural gas
       liquids
       ($ per Bbl)      68.85        -      n/a      67.94        -      n/a
      Barrels of oil
       equivalent
       ($ per Boe)(2)   72.41    50.30       44      69.11    84.14      (18)
    Netback per
     Boe ($)
      Petroleum and
       natural gas
       sales            72.41    50.30       44      69.11    84.14      (18)
      Royalties         11.96     4.03      197      10.27     7.47       37
      Operating
       expenses(3)      12.71    13.90       (9)     14.14    18.95      (25)
      Transportation
       expenses(3)       2.13        -      n/a       1.51        -      n/a
    -------------------------------------------------------------------------
    Operating Netback   45.61    32.37       41      43.19    57.72      (25)
    -------------------------------------------------------------------------
      Undeveloped
       land holdings
       (gross acres)  347,383   19,331    1,697    347,383   19,331    1,697
       (net acres)    259,787   12,324    2,008    259,787   12,324    2,008
    -------------------------------------------------------------------------
    Common Shares (000's)
    -------------------------------------------------------------------------
    Shares outstanding,
     end of period
      Common & Class A
       common shares   74,156    4,032    1,739     74,156    4,032    1,739
      Class B common
       shares               -      923      n/a          -      923      n/a
    Weighted average
     shares            60,487    4,944    1,123     24,454    4,770      413
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Management uses funds generated by operations to analyze operating
        performance and leverage. Funds generated by operations as presented
        do not have any standardized meaning prescribed by Canadian GAAP and
        therefore it may not be comparable with the calculation of similar
        measures for other entities
    (2) Boe conversion ratio for natural gas of 1 Boe: 6 Mcf has been used,
        which is based on an energy equivalency conversion method primarily
        applicable at the burner tip and does not necessarily represent a
        value equivalency at the wellhead
    (3) Transportation expenses in the 2008 fiscal year were reported as part
        of operating expenses

    ACCOMPLISHMENTS
    ---------------

        -  Recapitalized Glamis Resources Ltd., including change of
           management and board of directors

        -  Changed name to Legacy Oil + Gas Inc., simplified equity capital
           structure, consolidated shares on a 6:1 basis, and graduated from
           TSX Venture Exchange to TSX

        -  Closed one asset acquisition and one private company acquisition
           in the fourth quarter of 2009. The acquisitions provide
           conventional high netback light oil assets and a dominant position
           in an emerging high-impact Bakken light oil resource play, adding
           appreciably to the Company's already significant Bakken play
           exposure. In 2009, closed a total of two asset and three private
           company acquisitions; acquiring high quality, high netback, light
           oil assets focused in the Company's southeast Saskatchewan core
           area

        -  Closed a $110 million equity financing in the fourth quarter of
           2009. In 2009, closed three equity financings totalling $215
           million

        -  Drilled 30 (23.5 net) oil wells with a 97 (96 net) percent success
           rate in 2009. Drilled 23 gross (18.0 net) oil wells in the fourth
           quarter of 2009, for a 100 percent success rate

        -  Increased average production from 366 Boe per day in 2008 to 1,881
           Boe per day in 2009 (414 percent increase); increased average
           production from 521 Boe per day in the fourth quarter of 2008 to
           4,728 Boe per day in the fourth quarter of 2009 (807 percent
           increase); exceeded 5,750 Boe per day 2009 exit production rate

        -  Increased funds flow from operations from $5.9 million in 2008 to
           $23.0 million in (293 percent increase) in 2009; increased funds
           flow from operations from $1.1 million in the fourth quarter of
           2008 to $17.4 million (1,498 percent increase) in the fourth
           quarter of 2009

        -  Increased operating netbacks from $32.37 per Boe in the fourth
           quarter of 2008 to $45.61 per Boe in the fourth quarter of 2009
           (41 percent increase)

        -  Reduced operating and transportation costs from $18.95 per Boe in
           2008 to $15.65 per Boe in 2009 (17 percent decrease) and to $14.84
           per Boe in the fourth quarter of 2009

        -  Reduced general and administrative ("G&A") costs from $13.41 per
           Boe in 2008 to $7.23/Boe in 2009 (46 percent decrease) while
           incurring significant one-time costs associated with the
           recapitalization of the Company. These one-time costs accounted
           for approximately $1.0 million ($1.52 per Boe) of the G&A expense
           in the year; further decreased G&A costs to $4.36 per Boe in the
           fourth quarter of 2009 (56 percent decrease over fourth quarter of
           2008)

        -  Increased proved plus probable reserves from 1.6 MMBoe at
           December 31, 2008 to 16.1 MMBoe at December 31, 2009, a 906
           percent increase

        -  Generated solid 2009 total proved plus probable finding and
           development ("F&D") costs of $22.81 per Boe (including future
           development costs ("FDC")) and $18.46 per Boe (excluding FDC),
           representing a 2.0 and 2.5 times recycle ratio respectively on
           fourth quarter 2009 operating netbacks

        -  Increased undeveloped land holdings from 12,324 net acres at the
           end of 2008 to 259,787 net acres at the end of the 2009 (2,008
           percent increase). Shot five 3D seismic surveys, acquiring 134
           square miles of data

        -  Entered new syndicated banking facility, and subsequently
           increased available line of credit to $110 million. Year end net
           debt was $54.0 million, representing approximately 0.5 times
           estimated forward cash flow (using strip pricing)

    Operations Overview
    -------------------
    

The Company drilled 30 gross (23.5 net) wells in 2009, up from 13 gross (12.5 net) wells in 2008, resulting in 29 gross (22.5 net) oil wells, for a 97 (96 net) percent success rate. In the fourth quarter of 2009, the Company drilled 23 gross (18.0 net) wells resulting in 23 gross (18.0 net) oil wells, for a 100 percent success rate. Activity in the fourth quarter included the drilling of 12 gross (9.9 net) Bakken horizontal wells in the Company's Stoughton/Heward, Star Valley and Taylorton areas. This successful operational momentum has continued into the first quarter 2010, with Legacy having drilled 18 gross (14.2 net) wells to-date. Legacy's field activity has been reduced as spring break-up has progressed through our operating areas. Legacy also shot five 3D seismic surveys in the fourth quarter of 2009, acquiring 134 square miles of data.

A number of wells were worked-over and repaired in the second half of the year to improve future production run times. The majority of the wells in the Heward area were electrified, which is expected to result in more consistent production and lower operating costs.

    
    RESERVES
    --------
    

In accordance with National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities (NI 51-101), Sproule Associates Ltd. ("Sproule") evaluated, as at December 31, 2009, 100 percent of Legacy's oil, natural gas liquids and natural gas reserves. The AIF contains Legacy's reserves data and other oil and gas information for the period ended December 31, 2009 as mandated by NI 51-101. A copy of the AIF can be obtained under Legacy's profile at www.sedar.com or at www.legacyoilandgas.com. The summary information provided below should be read in conjunction with the detailed information in the AIF.

As of December 31, 2009, Legacy's gross proved plus probable reserves base was 16.1 million Boe. Proved plus probable reserves additions before divestitures were 16.1 million Boe. These additions represent 2,300 percent of the 0.7 million Boe produced during 2009. Light and medium oil accounted for 95 percent of the proved plus probable reserves base.

Legacy's gross total proved reserves base was 9.7 million Boe. Total proved reserves represent 60 percent of the total proved plus probable reserves. Proved producing reserves represent 66 percent of the total proved reserves base. Total proved reserves additions before divestitures were 10.0 million Boe. These additions represent 1,430 percent of the 0.7 million Boe produced during 2009. Light and medium oil accounted for 95 percent of the total proved reserves base.

The following table is a summary, as at December 31, 2009, of Legacy's petroleum and natural gas reserves as evaluated by Sproule. It is important to note that these estimates are subject to positive and negative revisions as additional reservoir and production information becomes available. The reserves attributed to Legacy are based on judgments regarding future events; therefore actual results will vary and the variations may be material. Reserves information may not add due to rounding.

    
    -------------------------------------------------------------------------
    Gross Reserves Summary - Company Interest
    Using Sproule December 31, 2009 Forecast Prices and Costs
    As at December 31, 2009

                                  Light and    Natural              Total Oil
                                 Medium Oil        Gas      NGL's  Equivalent
                                      (MBbl)     (MMcf)     (MBbl)     (MBoe)
    -------------------------------------------------------------------------
    Proved Producing                6,007.6    1,720.5       92.1    6,386.4
    Proved Developed Non-Producing    125.7       17.8          -      128.7
    Proved Undeveloped              2,985.4    1,187.8       39.9    3,223.3
    Total Proved                    9,118.8    2,926.1      131.9    9,738.4
    Total Proved plus Probable     15,246.4    4,146.5      201.4   16,138.9
    -------------------------------------------------------------------------


    CAPITAL EXPENDITURES AND FINDING, DEVELOPMENT AND ACQUISITION ("FD&A")
    COSTS
    ----------------------------------------------------------------------
    

Legacy incurred capital expenditures of $599.4 million in 2009, of which $562.2 million was spent on strategic corporate and property acquisitions in the Company's core operating areas.

The Company's total proved plus probable FD&A costs for 2009 were $45.92 per Boe (including FDC) and $38.36 per Boe (excluding FDC). These costs reflect the costs of assembling the current opportunity portfolio, with the acquisitions containing a significant component of undeveloped land with no attributable reserves.

The 2009 total proved plus probable F&D costs were $22.81 per Boe (including FDC) and $18.46 per Boe (excluding FDC), representing an impressive 2.0 and 2.5 times recycle ratio respectively on fourth quarter 2009 operating netback. The F&D costs are robust considering approximately 35 percent of total 2009 capital expenditures were directed at facility upgrades and exploration spending (seismic and drilling) undertaken in the fourth quarter of 2009 to satisfy inherited flow-through spending commitments. In addition, the timing of capital spending was such that the full operational impact was not incorporated into reserve additions. As the Company continues its operational activity and momentum, finding and development costs should improve further, driven by the Company's more than 250 unbooked development drilling locations.

    
    -------------------------------------------------------------------------
                                                                Total Proved
    2009 Capital Expenditures                                plus Probable(2)
    Capital costs ($ thousands)
      Exploration & development drilling
       & associated costs                                             30,022
      Land & seismic                                                   7,196
      Net acquisitions                                               562,200
      Change in FDC(1)                                               118,121
    -------------------------------------------------------------------------
      Total                                                          717,539

    2009 Reserve Additions(3) (MBoe)
    Exploration & development                                        2,016.4
    Net acquisitions                                                13,610.4

    2009 Finding & Development Costs ($ per Boe)
    Finding & development costs including FDC(4)                       22.81
    Finding & development costs excluding FDC(4)                       18.46

    Finding, development & acquisition costs including FDC(4)          45.92
    Finding, development & acquisition costs excluding FDC(4)          38.36
    -------------------------------------------------------------------------
    (1) The aggregate of the exploration and development costs incurred in
        the most recent financial period and the change during that period in
        estimated future development costs generally will not reflect
        total finding and development costs related to reserve additions for
        that period
    (2) Based on gross reserves meaning the total company interest (operated
        and non-operated) share before deduction of royalties payable to
        others
    (3) Boe conversion ratio for natural gas of 1 Boe: 6 Mcf has been used,
        which is based on an energy equivalency conversion method primarily
        applicable at the burner tip and does not necessarily represent a
        value equivalency at the wellhead
    (4) Excludes revisions

    OUTLOOK
    -------
    

Although Legacy posted impressive production and financial results for 2009 when compared to historical Glamis results, the management team views the past year as a transitional year, largely positioning the Company for future growth. Since the recapitalization, quarterly results have reflected partial impact of the acquisitions and our operational activity did not achieve meaningful levels until late in the year. Consequently, the majority of our 100 percent drilling success had minimal impact on 2009 production and reserves.

Our capital investments in these past five months, however, have been made strategically. Legacy has an inventory of more than 380 gross light oil development drilling locations of which 67 percent are unbooked in our December 31, 2009 independent reserve evaluation. We believe the visibility of reserves, production and cash flow growth from Legacy's asset base will be demonstrated in 2010 and beyond.

As previously disclosed, Legacy expects to invest $117 million in capital expenditures in 2010, largely weighted to the drilling, completion and tie-in of 76 gross (58.7 net) wells. The Company's high quality, light oil development inventory will drive strong per share production growth over the next three to five years. Concurrent with the execution of the development program, Legacy continues to evaluate and bring forward incremental opportunities that could add significant value for shareholders; including work-overs, infill drilling, step-out drilling, secondary recovery projects, greenfield initiatives and acquisitions.

Legacy shareholders will continue to benefit from the Company's significant light oil resource play exposure. Resource plays, particularly light oil, have been highly sought after in our industry for their ability to provide a multi-year, low risk growth platform due to the repeatable nature of the production results, predictability of costs and resulting economics. Legacy has established itself as a leader in light oil resource play development and intends to lever this expertise into the discovery, commercialization, capture and ultimate development of additional light oil resource play opportunities within and outside of its current operational area. These efforts are intended to bolster Legacy's already impressive development growth opportunities while solidifying the long-term sustainability of our business plan.

Legacy embarks on 2010 positioned with high quality light oil assets, an excellent balance sheet, significant opportunity inventory and dedicated people for continued aggressive and disciplined growth.

    
    ANNUAL GENERAL & SPECIAL MEETING
    --------------------------------
    

Legacy's Annual General and Special Meeting, is scheduled for 2:00 pm on Tuesday, May 25, 2010 in the Strand/Tivoli Room at the Metropolitan Conference Centre, 333 - 4th Avenue SW, Calgary, Alberta.

To view Legacy's audited financial statements the related MD&A and the AIF for the years ended December 31, 2009 and December 31, 2008 please visit our web site at www.legacyoilandgas.com or www.sedar.com. To the extent investors do not have access to the internet, copies of the audited financials the related MD&A and the AIF can be obtained on request without charge by contacting Legacy at 403.441.2300 or at 3900, 205-5th Avenue SW, Calgary, Alberta, T2P 2V7.

FORWARD LOOKING STATEMENTS: This press release contains forward-looking statements. More particularly, this press release contains statements concerning planned capital expenditures and exploration and development activity. The forward-looking statements are based on certain key expectations and assumptions made by the Company, including expectations and assumptions concerning the availability of capital, the success of future drilling and development activities, the performance of existing wells, the performance of new wells and prevailing commodity prices. Although the Company believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because the Company can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, risks associated with the oil and gas industry in general (e.g., operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to production, costs and expenses, and health, safety and environmental risks), commodity price and exchange rate fluctuations and uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects or capital expenditures. Certain of these risks are set out in more detail in the Company's Annual Information Form which has been filed on SEDAR and can be accessed at www.sedar.com. The forward-looking statements contained in this press release are made as of the date hereof and the Company undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

Meaning of Boe: When used in this press release, Boe means a barrel of oil equivalent on the basis of 1 Boe to 6 thousand cubic feet of natural gas. Boe per day means a barrel of oil equivalent per day. Boe's may be misleading, particularly if used in isolation. A Boe conversion ratio of 1 Boe for 6 thousand cubic feet of natural gas is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

This press release shall not constitute an offer to sell, nor the solicitation of an offer to buy, any securities in the United States, nor shall there be any sale of securities mentioned in this press release in any state in the United States in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state.

Neither the TSX NOR its Regulation Services Provider (as that term is defined in the policies of the TSX) accepts responsibility for the adequacy or accuracy of this RELEASE.

%SEDAR: 00023400E

SOURCE Legacy Oil + Gas Inc.

For further information: For further information: Trent J. Yanko, P.Eng., President + CEO, Legacy Oil + Gas Inc., 3900, Bow Valley Square II, 205 - 5th Avenue SW, Calgary, AB, T2P 2V7, Telephone: (403) 441-2300, Fax: (403) 441-2017; Matt Janisch, P.Eng., Vice-President, Finance + CFO, Legacy Oil + Gas Inc., 3900, Bow Valley Square II, 205 - 5th Avenue SW, Calgary, AB, T2P 2V7, Telephone: (403) 441-2300, Fax: (403) 441-2017

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